Update: Mogujie would announce US$200 million funding, instead of acquisition, from a group of investors excluding Alibaba in June 2014.
Alibaba Group reportedly is near acquiring Mogujie, a Pinterest-style social shopping service for $200 million.
Mogujie was founded by former Alibaba employees and is based in the same city as the e-commerce giant. Launched in February 2011, it would become one of the two largest social shopping sites in China. It’s direct competitor is Meilishuo which but is focused only on women.
Almost all social shopping services are depending on Alibaba as a majority of items for those sites to index are from Taobao and Tmall. Both Mogujie and Meilishuo make most of revenues from referral commissions, a large percentage of which is from Alibaba properties — The rest is from display advertising.
So far Mogujie has raised four rounds of funding,
- Several million yuan in seed funding from Amiba Ventures in early 2011;
- Several million USD in Series A round from Trust Bridge Partners and Bertelsmann Asian Investments in May 2011;
- More than ten million USD in Series B from Qiming Venture Partners and Bertelsmann Asian Investments in late 2011 (The total from A and B rounds is about $20 million, as reported);
- More than ten million USD in Series C from IDG Ventures, Qiming Venture Partners and Bertelsmann Asian Investments in late 2012.
It’s not the first time Mogujie is rumored to be merged into Alibaba. Social shopping is one thing that Alibaba seems never to have done right. It also launched a Pinterest clone, WoW, in the same month as Mogujie. From then on a handful of social shopping or online shopping sharing services were released by different divisions of the company. But none of them has been widely adopted as compared with Mogujie or Meilishuo. Most recently it opened up the social shopping platform for everyone to set up a Pinterest-like service there.
There’s also rumor that Alibaba restricted access to its e-commerce marketplaces, for it is said that Alibaba wasn’t happy about the fact that Meilishuo and Mogujie grew so big and were making money on top of it. It is founded that the organic traffic on Mogujie and Meilishuo started decelerating. In June 2013, Li Yanzhu, co-founder of Mogujie left the company.